The International Monetary Fund (IMF) has projected that Nigeria’s economy will grow by 3.0% in 2025.
This is according to its latest World Economic Outlook report released by the Fund on Tuesday.
This marks a downward revision from its October 2024 forecast of 3.2%, and falls well short of the Federal Government’s ambitious 2025 budget projection of 4.6%.
For 2026, the IMF expects Nigeria’s growth to slow slightly to 2.7%, further underlining concerns about the sustainability of current recovery efforts and the broader challenges facing Africa’s largest economy.
The IMF’s forecast contrasts with data from Nigeria’s National Bureau of Statistics (NBS), which reported that the economy grew by 3.84% in real terms in Q4 2024, an improvement over the 3.46% recorded in Q4 2023 and Q3 2024.
The NBS noted that growth was driven largely by a modest recovery in the non-oil sector, increased agricultural output, and improved services performance.
“Nigeria’s Gross Domestic Product (GDP) grew by 3.84% (year-on-year) in real terms in the fourth quarter of 2024. This growth rate is higher than the 3.46% recorded in the fourth quarter of 2023 and the third quarter of 2024 growth rate,” the NBS stated.
IMF commends reforms, warns of lagging impact
Recently, the IMF Mission led by Axel Schimmelpfennig acknowledged that Nigeria has made “important steps” to stabilise the macroeconomic environment.
These include the removal of fuel subsidies, liberalization of the foreign exchange market, and cessation of central bank financing of fiscal deficits, key reforms initiated by the administration of President Bola Tinubu.
While praising these reforms, the IMF warned that the benefits have yet to be broadly felt by ordinary Nigerians. The institution raised concerns about persistently high poverty levels, food insecurity, and inflationary pressures, which continue to erode household purchasing power and delay inclusive economic recovery.
“Gains have yet to benefit all Nigerians as poverty and food insecurity remain high,” the Fund said.
Nigeria Outpaces Regional Peers, But Still Faces Internal Risks
Nigeria’s projected 3.0% growth places it ahead of regional heavyweights like South Africa, which the IMF expects to grow by 1.0% in 2025 and 1.3% in 2026. The average growth rate for sub-Saharan Africa is pegged at 3.8% in 2025 and 4.2% in 2026.
According to the report, “For sub-Saharan Africa, growth is expected to decline slightly from 4 per cent in 2024 to 3.8 per cent in 2025 and recover modestly in 2026, lifting to 4.2 per cent. Among the larger economies, the growth forecast in Nigeria is revised downward by 0.2 percentage point for 2025 and 0.3 percentage point for 2026, owing to lower oil prices, and that in South Africa is revised downward by 0.5 percentage point for 2025 and 0.3 percentage point for 2026, reflecting slowing momentum from a weaker-than-expected 2024 outturn, deteriorating sentiment due to heightened uncertainty, the intensification of protectionist policies, and a deeper slowdown in major economies. South Sudan has a downward revision of 31.5.”
In comparison, Emerging Markets and Developing Asia are projected to grow at 4.5% in 2025 and 4.6% in 2026, while the United States is projected to have ga rowth rate of 1.8% in 2025 and 1.7% in 2026.
Advanced Economies were projected to have growth rates of 1.4% in 2025 and 1.5% in 2026.
Despite Nigeria’s relatively higher growth forecast, the IMF emphasised that significant internal vulnerabilities—particularly inflation, unemployment, and food insecurity—could weigh heavily on its long-term prospects.
Monetary Policy and Inflation Management
The IMF earlier acknowledged the efforts of the Central Bank of Nigeria (CBN) under its new leadership, commending its data-dependent monetary policy stance.
The IMF stated that this approach was appropriate for managing Nigeria’s complex inflationary environment and navigating broader macroeconomic uncertainty.
The CBN has recently implemented a series of interest rate hikes and adopted tighter monetary controls in a bid to rein in inflation, which rose to 24.23% in March 2025, largely driven by food and transport costs.
